Chapter 13 bankruptcy can do more than prevent foreclosure

On behalf of Goldman & Beslow, LLC posted in Chapter 13 on Wednesday, April 20, 2016.

New Jersey consumers who are overwhelmed by mountains of debt may find comfort in learning that there are ways in which debt problems can be resolved without losing their homes and cars. Chapter 13 bankruptcy is one of the options available through the U.S. Bankruptcy Code to protect consumers against foreclosure, creditor harassment, wage garnishments and more. This option allows a consumer to continue paying off debts according to a court-approved payment plan.

Filing for Chapter 13 bankruptcy can give a consumer a chance to catch up with accumulated debt. A payment plan will allow the filer to make a consolidated payment every month. The plan to repay debts over three to five years must be presented to the court for approval, and will then be monitored by a court-appointed trustee.

With the guidance of an experienced bankruptcy attorney, consumers may find that Chapter 13 can be used as a tool to lower interest rates on items such as car loans, and it may even be possible to reduce the settlement amounts of such loans. All types of debts can be included in the payment plan. If all payment obligations are met throughout the reorganization period, outstanding balances may be discharged by the court.

However, Chapter 13 may not be suitable for all New Jersey consumers. The most appropriate step to take may be to arrange a consultation with an experienced bankruptcy attorney who can assess the circumstances and explain the available remedies for a client's unique situation. Obtaining the necessary information will allow a consumer to make informed decisions about the most suitable route to take.

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